Mortgage Rescue Scheme has helped just 6 homeowners

30 June 2009 / by Rachael Stiles

Take-up of the Government's Mortgage Rescue Scheme remains slow, with just four more homeowners taking part in the scheme in May, to join the two which have been accepted onto the scheme since it launched in January.

A total of six people have now participated in the Mortgage Rescue Scheme, which is designed to give some leeway to homeowners struggling to meet their mortgage repayments.

The scheme allows participants to take part in one of two ways – Government Mortgage to Rent, which involves the local authorities buying the homeowner's property and renting it back to them, or the Shared Equity option, which offers the homeowner a loan which reduces their monthly mortgage payments.

Communities and Local Government have released statistics for Mortgage Rescue Scheme take-up in May, which monitors how many people approached their local authority for assistance, how many applied for the scheme, how many were accepted, and how many actually accepted the offer of participation in the scheme.

During May, 150 households applied for the scheme, of which 26 were made an offer of participation, but just four households accepted the offer.

A total 1139 individuals approached their local authority with mortgage difficulties in May, the statistics show. In the case of 202 people, the local government stepped in to prevent repossession, and in 79 cases it requested that a mortgage lender halt repossession proceedings which were already underway, and freeze any further charges for borrowers who had fallen into arrears.

A growing number of households have had trouble keeping up with their mortgage payments in addition to other outgoings as a result of the credit crunch. For example, many have struggled to secure a competitive deal on their mortgage after their fixed rate deals came to an end in a very different economic environment to when they took out the mortgage.

The Mortgage Rescue Scheme is part of the Gordon Brown's attempts to help consumers through the recession by easing the pressure on household finances.

Critics of the scheme have pointed to the low number of participants in the scheme as another failure for the Prime Minister.